The Current Market Environment for Business Transitions Presented

The Current Market Environment for Business Transitions Presented By: GEORGE CALFO SUNTRUST ROBINSON HUMPHREY MERGERS & ACQUISITIONS

Key Themes in Middle Market M&A The M&A market is healthy with several macro factors facilitating strong valuations and deal volumes • Business Confidence the next 12 months • Hiring grew at a robust 6. 7% over the past 12 months and expectations are for an additional 4. 8% over the next 12 months • 90% of U. S. middle market companies express confidence in local economic conditions (compared to 86% for the aggregate U. S. economy) Strong Market Valuations • Stock markets hover at all-time highs with rich public trading multiples in the majority of the industry sectors • M&A deals have resulted in strong valuations given buyer’s ability to pay up and still achieve accretive transactions Constructive Debt Markets • Despite the recent increases, companies are still able to borrow at historically very attractive rates that facilitates higher purchase prices • Banks are well-capitalized with an appetite to book more loans for healthy and high-growth companies • Significant pools of private equity have been raised in recent years with fund managers eager to put the capital to work • Corporate tax reductions and incentives for large corporations to repatriate some of the estimated >$2. 0 T held abroad Significant Cash on the Sidelines 2 Revenue growth of 7. 4% over the past 12 months (vs 6. 7% a year ago and historical average of 6. 8%) and growth expectations of 6. 7% over www. suntrustrh. com

Middle Market M&A Activity • The M&A market has been consistently active in recent years with ~2, 000 deals taking place per quarter with either undisclosed deal values or transactions <$500 MM • Valuations in the M&A market have followed the public markets, with strong valuations across most all sectors • Capital continues to flow into private equity funds, which creates strong deal demand from the financial buyers Average EV / LTM EBITDA Valuations Over Time by Sector (1) Source: Thomson. One M&A Activity for Deals(1) <$500 MM and Undisclosed Source: Thomson. One (1) 3 Industries excluded: Real Estate www. suntrustrh. com

Private Equity – Deal Activity Market Observations Disclosed Private Equity Buyout Deal Value 2 Q 2018 Buyout Deals By Industry ($ Billions) • Leading sectors by deal volume for the year include High Technology, Consumer Products & Services, and Consumer Staples • A growing buyer universe with an abundance of dry powder has driven continued high volume in the buyout market • LBO purchase multiples for 1 H 2018 declined from the high level in 2017 – Purchase price multiples dipped to 9. 8 x for 1 H 2018, reaching the low level last seen in 2014 • Sponsor equity contributions sit at 39. 2% of enterprise value for 1 H 2018, a decline from the high in 1 H 2017 of 41. 7% – The decline in equity contributions is the first decrease since the beginning of 2015 Source: S&P, Buyouts Magazine, Pitch. Book 4 www. suntrustrh. com LBO Purchase Multiples LBO Equity Contributions

Middle Market M&A Activity Important Reasons When Deciding to Buy 68% Adding new markets and customers 45% 42% Diversifying product or service portfolio Acquiring new talent or leadership M&A Frequency ~20% ~5% Complete An Acquisition Annually Sell To Or Merge Into Another Business Each Year Important Reasons When Deciding to Sell 20% Succession or retirement issues Key Challenges 1 2 5 19% 18% Opportunity to sell at an attractive price Competition #1 Valuation #2 Integration 41% of Buyers / 43% of Sellers 44% of Buyers & Sellers National Center for the Middle Market Survey Thomson. One www. suntrustrh. com 45% FOR SALE No Plans To Sell But An Attractive Opportunity Presented Itself Experience with M&A 70% Of Acquirors Had Little Or No Previous Experience 90% Of Companies That Sold Or Merged Had Little Or No Previous Experience

Founder / Owner Observations in the Middle Market What Executives are Seeing in the Market: ü Companies are performing well in today’s market and executives feel very confident about the next 12 -18 months ü There appears to be a lot of interest from both investors and strategic industry consolidators ü Many business owners have indicated they receive an average of one external solicitation per week Questions on the Owner’s Mind: ? What is the right timing for a transition? ? What are the right steps to prepare? ? What is my business worth? ? How do I handle the risk of having all my eggs in one basket? 6 www. suntrustrh. com Market Concerns: ✜ When does this cycle end? ✜ I’m not ready to retire, but I’m concerned about the next downturn ✜ I am seeing the consolidation trend, and will I be able to keep up and compete on my own? How Should I Transition My Business? Is the next generation prepared to manage or interested in the business? My risk tolerance is different than my kids in the business How do I plan for and structure the ownership for a transition? What are the objectives of private equity owners and what control will I have over the business?

Transaction Readiness and Planning 7 7 www. suntrustrh. com

Process Considerations Key Issues in an M&A Process Financial • Historical vs. prospective results • Valuation • Form of consideration • Tax implications • Use of proceeds • Financing contingencies Buyer/Seller • Setting criteria for targets • Strategic fit/synergies • Interest/motivation to close transaction • Financial capacity to close transaction • Relationship consideration • Confidentiality/ competitive impact • Cultural fit Procedural • Process: broad auction, • Confidentiality – impact • Timing/urgency • Structure of deal • Negotiation of purchase • Management retention • Employee retention • Information targeted auction, negotiated agreement • Negotiation of ancillary agreements, e. g. , employment, noncompete agreements • Board process and legal considerations Negotiating Leverage as a Deal Progresses 8 www. suntrustrh. com Operational on customers, vendors, partners, etc. sharing/access to proprietary data • Transition considerations • Management “bandwidth” to handle acquisition process

Steps to Manage M&A Complexity and Get Deal-Ready 1. Start with the long view Have a long term vision encompassing business and personal paths 2. Develop a clear M&A strategy Link vision and business goals to the potential for M&A to create business value 3. Read the economy and M&A market Monitor your industry and the economy looking for the best time to activate M&A 4. Map out your deal journey Determine the resources and time you will need to undertake your M&A deal journey 5. Build an M&A team with industry knowledgeable advisors Know the skills and experience you will need to complete a successful M&A deal 9 www. suntrustrh. com

Important Disclosures This presentation is for informational purposes only and is being furnished on a confidential basis. By accepting this information, the recipient agrees that it will use the information only to evaluate its potential interest in the strategies described herein and for no other purpose and will not divulge any such information to any other party. This presentation does not constitute a commitment to lend money, underwrite any proposed transaction, purchase securities or other assets, provide financing, arrange financing, or provide any other services. Sun. Trust Robinson Humphrey, Inc. and its representatives and affiliates make no representation and have given you no advice concerning the appropriate regulatory treatment, accounting treatment, or possible tax consequences of the proposed transactions described herein. Prior to entering into any proposed transaction, you should determine, without reliance upon Sun. Trust Robinson Humphrey, Inc. or its representatives or affiliates, the economic risks and merits, as well as the legal, tax and accounting characteristics and consequences, of the transaction and that you are able to assume these risks. These materials should not be relied upon for the maintenance of your books and records or for any tax, accounting, legal or other purposes. All materials, including proposed terms and conditions, are indicative and for discussion purposes only. Finalized terms and conditions are subject to further discussion and negotiation and will be evidenced by a formal written agreement. Except as required by applicable law, we make no representation or warranty, express or implied, to you or to any person as to the content of the information contained herein. Opinions expressed herein are current opinions only as of the date indicated. Any historical price(s) or value(s) are also only as of the date indicated. We are under no obligation to update opinions or other information. In connection with Treasury Regulation Section 1. 6011 -4, it is our mutual intent that the tax structure and tax treatment of the transactions contemplated by this presentation are not confidential and that notwithstanding anything herein to the contrary that each of us (and our employees, representatives and agents) may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of the transactions contemplated herein. Sun. Trust Robinson Humphrey is the trade name for the corporate and investment banking services of Sun. Trust Banks, Inc. and its subsidiaries. Securities underwriting and M&A advisory services are provided by Sun. Trust Robinson Humphrey, Inc. , member FINRA and SIPC. │ Lending, financial risk management, and treasury and payment solutions are offered by Sun. Trust Bank. │ Deposit products are offered by Sun. Trust Bank, Member FDIC. © Sun. Trust Banks, Inc. All rights reserved. 10 www. suntrustrh. com